Johannesburg - The State has lodged an 87-page high court bid to go after the personal assets of the executives accused of looting VBS Mutual Bank of more than R1.5 billion in a fraud scheme of epic proportions. Some of the executives allegedly lived the high life of billionaires, raiding depositors' money to purchase mansions, sports cars and a helicopter.
In the strongly worded court application, the State has given a clear indication of recovering every cent of depositors' money lost through the “large-scale fraud” allegedly committed by the bank’s executives. The biggest victims of the fraud were 21 municipalities, community members and businesses in Venda as well as the Public Investment Corporation (PIC).
In the court bid, seen by The Star, curator Anoosh Rooplal has brought an urgent application in the high court in Joburg to have Andile Ramavhunga, the bank’s chief executive, sequestrated first. Rooplal said the move to urgently sequestrate Ramavhunga was “due to the fraud he, together with Vele Investments and others, perpetrated against VBS, its depositors and local municipalities”.
Ramavhunga was the prime target of the sequestration bid because he still enjoyed some control over the bank's assets as its former chief executive. He also had in his possession properties and cars bought with millions allegedly stolen from the bank. Reserve Bank governor Lesetja Kganyago, who placed VBS under curatorship when its liquidity crisis worsened, this week said the bank’s executives were believed to have stolen 75% of its assets.
“An order for Ramavhunga’s sequestration will enable a liquidator to begin the process of recovering VBS’s funds and/or assets in his possession,” Rooplal said. “In view of the pervasive nature of the fraud, the monetary amount involved and the ongoing use by Ramavhunga of the ill-gotten gains, it is necessary for Ramavhunga’s estate to be sequestrated and be placed in the hands of a trustee”
Rooplal made it clear in his affidavit that Ramavhunga was not the only executive of the collapsed bank targeted for sequestration. The curatorship also intended to secure assets in possession of VBS’s largest shareholder, Vele Investments, a company which received most of the siphoned money.
“An application for Vele’s winding up will be brought simultaneously with the provisional sequestration applications of its controlling minds: Tshifhiwa Matodzi, Robert Madzonga and Ramavhunga.
“Further simultaneous sequestration applications will be brought against Phillipus Nicholas Truter and Phopi Londolani Mukhodobwane.”
Rooplal did not beat about the bush in his affidavit that these five were the masterminds behind the plot to steal money that was deposited into VBS. He said findings from his own investigation had been “fortified” by a probe conducted by Terry Motau SC, assisted by Werksmans Attorneys.
“More egregious than the perpetration of a fraudulent scheme of such enormity is that the fraudulent scheme was orchestrated by the highest-ranking officials at VBS. The fraudulent scheme was devised and executed by Matodzi, Ramavhunga, Truter, Mukhodobwane and Madzonga,” said Rooplal.
He added that the executives had run their “fraudulent scheme of epic proportion” for more than a year and used the loot to live large with depositors’ money. They paid themselves hefty bonuses too, while some of the stolen depositors’ funds were allegedly used to bribe officials of public entities that VBS sought to bring onto its fold.
“This they used to fund their lifestyles, purchase immovable property, buy high-end motor vehicles, and take up shares and interests in other entities,” Rooplal said.
“The victims of the fraudulent scheme even extend insofar as a burial society.”
Reports have revealed that R12million from the bank’s coffers was splurged on a helicopter for Venda King Toni Ramabulana. Rooplal’s sequestration application does not target Ramabulana. Although a shareholder in VBS, the king was not an executive. Sequestration orders against the five executives would see them surrendering their estates and financial affairs to a trustee.
Their bank accounts would be frozen and assets seized. Madzonga, the chief executive at Vele Investments, stood to lose a bevy of luxury cars, some of which his wife Khosi posted on social media. Apart from the helicopter, Madzonga also owned two G63 Mercedes-Benz cars, a Rolls-Royce and an Audi R8 sports car.
Matodzi bought a R6.5m Ferrari with money in VBS’s possession. Ramavhunga declined to comment on the sequestration bid.